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London: The Hottest Tech Scene Since Silicon Valley?

London’s so-called "Silicon Roundabout" east of downtown can appear underwhelming. The attached Tube station is decrepit, the shops below ground are tatty, and at night its psychogeography seems deliberately designed to attract muggers and thieves.

It doesn’t get much better above the surface. Traffic swirls around the unwieldy Old Street roundabout , which is dominated by a huge billboard. Nearby City Road stretches north for a mile from the Thames and the City of London, home to London’s banks and finance.

The cityscape is depressing. Nothing seems to have been built since the area’s halcyon days of printing in the 1970s and 1980s, when it served the newspaper industry on nearby Fleet Street. Here, it feels as if it rains every day.

But just because it's ugly doesn’t mean it's unimportant. The Silicon Roundabout is the center of London’s emerging tech cluster; behind the disappointing facade, interesting things are brewing.

Civic and Angel Investment

Last December UK Prime Minister David Cameron announced that the government would invest £50 ($77) million to regenerate the roundabout itself. The new "civic" space will house startups and shared work spaces where students will learn to code; and an advertising screen will replace the aged billboard.

But it is the roundabout's surrounding streets where the real story begins. Restaurants and pubs are up-market, chic and cool, and the Hoxton Hotel serves as a focal point for the hundreds of entrepreneurs at startups flourishing in the area.

Some planning officials hope to link Silicon Roundabout five miles east, to the Olympic Park that hosted last year’s Olympics. While those intentions are fanciful (some jokers have even called the idea "Silicon Ditch"), there is no doubt that something is at work here.

The Olympics were obviously a boost to the area. Irish playwright George Bernard Shaw once said that every new yard of West End created a new acre of East End, and this is particularly true for London. The money previously invested in the traditional film, TV and advertising industries in Soho to the West was never replicated in this neglected part of the city.

This is changing. The Tech City Investment Organisation (TCIO) is funded by the UK Trade & Investment, which supports companies exporting from or investing in the UK. Its aim is to support the growth of the tech cluster in East London and to champion a 50% tax relief for angel investors, on investments of up to £100,000.

Moreover, tax breaks of 78% are available until 2014, meaning that with other benefits (such as loss relief), investors can write off 100% of those startups that fail.

“We're seeing a new generation of businesses emerge in London's tech and creative industries," he says. "A number of factors are contributing to this: One is the collision of ideas that happens in a cluster, from being surrounded by other entrepreneurs and innovators. This is hugely exciting.

“This collaboration and creativity is translating into jobs and economic growth. We're doing everything we can to foster this growth and act as world-class mentors for the next stage of entrepreneurs.”

Ivan Mazour is the CEO and founder of Ometria, an ecommerce analytics software startup. He is also an angel investor, one who is particularly impressed by the training available at Silicon Roundabout.

“After immersing myself in the many events that take place, it immediately becomes clear that the startup scene in London is really impressive in the way that the ecosystem has developed methods for inciting people to join, and training them so that they can participate," he says.

"Having experienced things both as an investor and the founder of a startup, the technology and entrepreneurship courses in London have proven to be considerably more useful than a mathematics degree from Cambridge," he adds.

Tech Giants in London

In the heart of the community, there’s Google Campus, seven floors of mentoring programs, flexible work spaces, high-speed Internet and a host of events "powered' by the startup community.

PageHub has set up there. One of the few companies to be awarded Facebook's Preferred Marketing Developer status, PageHub’s online software helps brands to manage and monitor their activities on Facebook. Its CEO is James Devonport Wood, a young man who epitomizes the energy of Tech City.

“The explosive growth of the tech scene in London in recent years has been phenomenal," says Devonport. "Where only five years ago there were only a handful of meet-ups and hack events every month, there are now several every day.

“The next true test for Silicon Roundabout is whether it can produce a true global tech giant, avoiding the temptation of an early exit that are so common among European startups.”

Innovation Is Contagious

Silicon Roundabout is not only booming; it is also spreading. Across the river in Greenwich, the focus is on incubation and investment.

Backed by the Royal Borough of Greenwich and Digital Enterprise Greenwich, the area's Digital Peninsula is emerging as a major destination for creative London startups attracted by the promise of business support, high-tech infrastructure and a highly skilled talent pool.

Ravensbourne’s digital incubator venture, DMIC, has already attracted more than 120 creative businesses to Greenwich, and works closely with global giants such as Cisco and Ogilvy Labs. Its London Transmedia Fest, the largest festival of its kind in the world, has fixed the area on the global map.

“Business incubators abound in London, and while we see ourselves very much as part of a wider ‘London’ ecosystem, we are about creating new innovative collaborations, new jobs and bringing new products and services to market," says Carrie Wootten, head of commercial development at Ravensbourne.

High Hopes

Back over at Silicon Roundabout, companies like the hugely successful Mind Candy, the owner of the Moshi Monsters game, are acting as beachheads for other startups on the rise. Companies (in no particular order) such as Songkick, Moo.com, Decoded, Huddle, Pusher, Halio, PeerIndex, Conversocial, OpenSignalMaps and many others are accomplishing amazing things in their particular sectors. Their success is vital in ensuring that Silicon Roundabout continues trending upwards.

Now we just have to hope that the government spends its £50 million wisely — that visitors don't immediately focus on that ugly roundabout, but rather, become overwhelmed by the beauty of innovation. And maybe a decent coffee shop or two.

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